JR Elsewhere

Archive for April 13th, 2009

Before you leap at the numbers and trends described in the following translation, be advised that JR is a bloody amateur who may misread sources, especially those written in Chinese, and washes his hands of every possible error.

北青网 (Bei Qing Wang, Beijing Youth’s Daily‘s news website) published a review of the central government’s stimulus package of November last year (four trillion Yuan) and its effects to date this morning. The actual news – or rumor – is that the State Council may discuss a second stimulus package on its Wednesday routine session (April 15), “on its administrative level”. The economic review was originally published by Jinan Daily, also this morning, and mostly refers to economic indicators of the first quarter, the first real data available to assess the impact of the stimulus package. The reporter refers to interviews with Fang Sihai (房四海, chief economist at Hongyuan Securities) and Gao Shanwen (高善文 , chief economist at Essence Securities) conducted in the last few days, and to comments by Frank Gong (龚方雄 , JP Morgan Hong Kong) and Ma Jiantang(马建堂, head of the National Bureau of Statistics).

The second package, if it comes, is supposed to focus on the people’s livelihood and on consumption rather than on infrastructure, says the article. It mentions the medical system, agriculture, new or renewable energy, real estate, banks, household appliances, cars, textiles, and communication electronics.

Gao Shanwen was more optimistic about China’s economic outlook in February, according to China Daily back then. He now says that with the exception of the machine-building industry, electric equipment, and transportation industries, the industrial indicators offer little reason to be optimistic. And Zhang Ping (张平, National Development and Reform Commission director) explained in March that while investment in infrastructure accounted for some 1.5 trillion Yuan of the stimulus package, domestic steel prices suggested that there were overcapacities, and that the infrastructure investments wouldn’t substantially change domestic demand for steel.

Other indicators such as electricity generation and consumption, CPI (consumer price indexes) and PPI (producer price indexes) are said to be pointing downwards. As for the latter two indexes, “an informed government official, talking with Overseas Xinhua Financial Report”, is quoted.

All that said, the article doesn’t leave its readers without words of encouragement. The state still has many cards to play, it says, referring to a statement by premier Wen Jiabao at the NPC’s annual session (or the parallel Consultative Conference) in March. Lowering taxes, subsidizing low incomes and intensifying support for labor-intensive service industries (to create jobs) are cited as options.

Besides, after the G20 summit, its general agreement on the need for more stimulae, and Australia’s and Japan’s packages passed within a week after the summit, “the whole world is now looking on China”, Fang Sihai is quoted.